Dec. 11 (Bloomberg) -- U.S. prosecutors won the right to
have the jury weighing insider trading charges against
SAC Capital Advisors LP's Michael Steinberg hear that the key
witness against him wasn’t just testifying against his former
boss to save his own skin.

U.S. District Judge Richard Sullivan in Manhattan Sullivan
today said former SAC analyst Jon Horvath could be questioned
about his motive to cooperate with the U.S. and describe what
information he provided in a federal criminal insider-trading
probe of SAC, including names of insiders at companies who fed
him illegal tips.

The judge said it was “fair game” based on Steinberg’s
defense lawyer’s opening argument to jurors that Horvath had
lied and fabricated his testimony against Steinberg because
there was no one else he could implicate in wrongdoing.

“It goes to the cost-benefit analysis,” Sullivan said at
a hearing today outside the jury’s presence. “If he’s already
provided information on other individuals he’s reluctant to lie
on the stand now.”

Assistant U.S. Attorney Antonia Apps yesterday asked
permission to question Horvath about the information he provided
after he decided to plead guilty and cooperate in September
2012, a month before his own insider-trading trial was set to
start.

Provided Information

“He provided information to the government in connection
with the government’s investigation of SAC Capital,” Apps said.
“He also provided information about individuals who provided
him with information he considered to be material nonpublic
information.”

Steinberg, 41, is charged with conspiracy and four counts
of securities fraud for allegedly making more than $1.4 million
by trading on tips Horvath shared with other hedge fund analysts
about Dell Inc. and Nvidia Corp. from 2007 to 2009.

Barry Berke, Steinberg’s attorney, spent five days cross-examining Horvath, suggesting in questions that Horvath
fabricated his testimony and blamed Steinberg for his own crimes
because he had no one else to provide information on. Four of
Horvath’s co-conspirators had already pleaded guilty, he said.

Compliance Practices

Apps said she wants to ask Horvath to talk about whom he
identified to the government as his sources of illegal tips, as
well as information he divulged on hiring and compliance
practices at SAC. She told Sullivan the people include employees
at Ingram Micro Inc. and Sun Microsystems Inc. and a sell-side
analyst whom she didn’t identify.

Berke argued against allowing Apps to question Horvath
about the federal probe of SAC.

Sullivan said it was relevant to ask Horvath whether he
understood when he decided to plead guilty and cooperate that
SAC was a target of the government’s probe and that if he
provided information about the hedge fund, he could benefit from
cooperating with the government.

“If he says ‘I don’t know that,’ then that’s an important
fact,” for the jury to hear, Sullivan said.

SAC agreed to close its investment advisory business as
part of a $1.8 billion deal announced Nov. 4 to end a criminal
probe and a money-laundering suit filed by prosecutors in
Manhattan U.S. Attorney Preet Bharara, who has called SAC “a
veritable magnet for market cheaters.”

Billionaire Steven Cohen, the founder of the Stamford,
Connecticut-based firm, hasn’t been charged with a crime.

The case is U.S. v. Newman, 12-cr-00121, U.S. District
Court, Southern District of New York (Manhattan).

To contact the reporter on this story:
Patricia Hurtado in Federal Court in Manhattan at